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Economy

Brent Hits $90 as Saudi, Russia Shock Market with Prolonged Cuts

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Saudi Arabia oil cut

By Adedapo Adesanya

The price of the international crude benchmark, Brent crude, jumped to $90.04 per barrel on Tuesday after growing by $1.04 or 1.2 per cent as Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year, raising supply worries.

This was the highest level Brent has reached since November 16, 2022, as the US West Texas Intermediate (WTI) crude futures gained $1.14 or 1.3 per cent to settle at $86.69 a barrel.

Saudi Arabia will extend its voluntary 1 million barrels per day crude oil production cut through the end of this year. Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected.

This brings Saudi Arabia’s targeted crude oil production to 9 million barrels per day for the remainder of the year.

On its part, Russia extended its voluntary decision to reduce its oil exports by 300,000 barrels per day to the end of this year, Deputy Prime Minister Alexander Novak said in a statement on Tuesday.

Both countries will review the cut decisions monthly to consider deepening cuts or raising output depending on market conditions.

Oil markets have been guessing how the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ will proceed with its oil production strategy, and this latest move offers some form of direction.

Saudi Arabia had proposed the additional 1 million barrels per day supply cut—a voluntary supply cut–as a July-only event. However, Saudi Arabia extended the production cut into August and September. The cut is not required as part of the deal reached with its OPEC and OPEC+ groups, rather it is in addition to the OPEC mandates.

Russia will join Saudi Arabia in extending the voluntary curbs allowing the Vladimir Putin-led country to collect more revenues amid its war in Ukraine and despite European Union attempts to limit the country’s income with a cap on Russian oil prices, which is now trading above the caps.

Also, support came as the flow of crude oil from Iraq to Turkey, which has been suspended since March 25 will not resume prior to October until Turkey’s President Tayyip Erdogan visits Baghdad. The trip was originally planned to take place in August but was pushed back.

The International Chamber of Commerce (ICC) suspended oil flows five months ago, ordering Turkey to pay the Iraqi government $1.5 billion in compensation for what it determined were unauthorized oil exports by the Kurdistan Regional Government (KRG) between 2014 and 2018 via the Iraq-Turkey pipeline and the port of Ceyhan.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

African Energy Bank Will Be Game Changer—Minister

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African Energy Bank Headquarters

By Adedapo Adesanya

The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said the African Energy Bank would change the energy fortunes of Nigeria and other African countries.

He gave this submission when he met with the President of the African Export-Import Bank (Afreximbank), Mr Benedict Oramah, in furtherance of ongoing engagements towards the commencement of operations by the lender.

The African Energy Bank is a collaborative effort between Afreximbank and the African Petroleum Producers Organisation (APPO). It is set to launch with an asset base of $5 billion, which is projected to grow to $120 billion in five years.

A statement by the minister’s spokesperson, Mrs Nneamaka Okafor, said the take-off of the bank would mark a significant milestone in Africa’s quest for energy security and sustainability.

The Minister described the bank as a landmark initiative poised to transform the continent’s energy landscape.

The statement added that Afreximbank, as a key partner, was transferring its full equity investment in the oil and gas sector, underscoring its commitment to driving energy infrastructure development across the continent.

During the meeting with Mr Oramah, Mr Lokpobiri reiterated Nigeria’s strong support for AEB and its pivotal role in unlocking Africa’s energy potential.

“Nigeria, as a leading oil and gas producer, is well positioned to leverage this transformative initiative,” the minister stated.

“We encourage industry players to seize this opportunity to invest in Africa’s energy future,” he added.

After their discussion, Mr Lokpobiri and Mr Oramah proceeded to the African Energy Bank headquarters for an inspection tour to assess the level of readiness ahead of the commencement of operations, the statement said.

“The visit provided first-hand insights into the bank’s operational preparedness and strategic alignment with Africa’s broader energy development goals,” it stressed.

Speaking on the significance of the bank, Mr Oramah emphasised the bank’s role in bridging Africa’s energy financing gap, saying, “The establishment of the Africa Energy Bank is a game-changer for the continent.”

The Afreximbank president commended Nigeria for taking the bull by the horns in hosting the headquarters of the bank. He expressed confidence in Nigeria’s oil and gas portfolio, saying the bank will not only benefit the energy sector in Africa, but will also guarantee immediate benefits for Nigeria.

Mr Lokpobiri reaffirmed Nigeria’s readiness to collaborate towards the success of the continental bank, describing it as a bold step.

“This bank represents a bold step in ensuring that Africa controls and finances its energy future. It is an avenue for stakeholders to invest in a self-sustaining energy sector that will drive industrialisation, job creation, and economic prosperity,” he said.

The statement said that as Africa prepared for the operational launch of the African Energy Bank, the Nigerian government called on industry stakeholders to engage proactively and explore the vast opportunities presented by the initiative.

“The successful take-off of the bank will mark a new era in Africa’s energy development, positioning the continent as a global force in the sector,” the statement added.

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Economy

Afriland Properties, CSCS Boost NASD Index by 0.38%

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NASD Unlisted Securities Index

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange maintained its upward movement on Thursday, February 13, with a 0.38 per cent gain.

This moved the market capitalisation of the trading platform higher by N6.94 billion to close at N1.818 trillion compared with the previous day’s N1.811 trillion and the NASD Unlisted Security Index (NSI) expanded by 12.24 points during the trading day to close at 3,210.04 points compared with 3,197.80 points recorded in the previous session.

The two companies ended on the gainers’ chart yesterday, with Afriland Properties Plc growing by N1.41 to trade at N20.41 per share versus N19.00 per share, and Central Securities Clearing System (CSCS) improved by N1.00 to finish at N24.50 per unit, in contrast to Wednesday’s N23.00 per unit.

The volume of securities traded in the session went down by 96.8 per cent to 465,820 units compared with the 14.7 million units recorded at midweek, the value of shares traded by investors depleted by 57.8 per cent to N9.6 million from the N22.8 million achieved a day earlier, and the number of deals went down by 50.00 per cent to 10 deals from the 20 deals recorded in the previous trading session.

When the market closed for the session, Impresit Bakolori Plc was the most active stock by value (year-to-date) with 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc was in third with 9.1 million units sold for N44.3 million.

Impresit Bakolori Plc was also the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by FrieslandCampina Wamco Plc with 7.4 million units sold for N294.6 million, and Afriland Properties Plc with 3.3 million units valued at N58.6 million.

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Economy

Naira Now N1,510/$1 at Official Market, N1,570/$1 at Parallel Market

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naira street value

By Adedapo Adesanya

The Naira witnessed a depreciation of 0.23 per cent or N1.80 on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, February 13.

According to data obtained by Business Post from the FMDQ Securities Exchange, the exchange rate of the Naira to the Dollar closed at N1,510.00/$1, in contrast to the preceding day’s N1,506.56/$1.

But the domestic currency closed flat against the Pound Sterling and the Euro in the spot market yesterday at N1,872.10/£1 and N1,559.96/€1, respectively.

The local currency, however, improved its value against the US Dollar at the parallel market on Thursday by N5 to trade at N1,570/$1 compared with the N1,575/$1 it was transacted at midweek.

In the cryptocurrency market, there were major positive outcomes after US inflation at the wholesale level came in faster than forecast last month in another disappointment to investors and policymakers hoping for cooling price pressures.

The Producer Price Index (PPI) rose 0.4 per cent in January versus forecasts for 0.3 per cent and 0.2 pr cent in December. On a year-over-year basis, PPI was higher by 3.5 per cent against estimates for 3.2 per cent and 3.3 per cent in December.

The markets were earlier surprised by Consumer Price Index (CPI) data for January that came in far stronger than estimate

Ripple (XRP) jumped by 3.8 per cent to close at $2.56, Litecoin (LTC) recorded a 3.5 per cent rise to trade at $127.02, Cardano (ADA) rose by 2.7 per cent to finish at $0.7981, Dogecoin (DOGE) appreciated by 0.5 per cent to sell at $0.2621, Bitcoin (BTC) gained 0.3 per cent to end at $96,751.51, and Solana (SOL) increased by 0.3 per cent to settle at $195.77.

On the flip side, Binance Coin (BNB) went down by 5.3 per cent to quote at $671.23, and Ethereum (ETH) depreciated by 0.4 per cent to close at $2,699.64, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.

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